Breaking bad habits: to achieve financial security, this single mother has to curb her indiscriminate spending and stop abusing money.

DON'T ASK JENNIFER BOGAR HOW many pairs of shoes she owns. "There are at least 30 hanging on the closet door alone. I can't even think about how many are stacked in boxes," says the 30-year-old self-proclaimed slave to fashion--and debt, Bogar has accumulated $11,000 in credit card debt from charging clothes, a computer, ceramic kitchen tile, and furniture for her two-bedroom townhouse in Irvington, New Jersey. "It was my first house. I wanted to have it look nice," says Bogar, who purchased the home for $100,000. "In retrospect, I should have waited." Then there's the travel itch she is compelled to scratch. Between May and June, she flew to Miami, Atlanta, and Puerto Rico.

Two years ago, Bogar, a single mother of a 5-year-old son, Aaron, took out an $18,000 home equity fine of credit to pay off her credit card bills and to get her debt under control. "If I'm going to accomplish anything, I have to get disciplined," she says. She is also determined to set some hard and fast financial goals.

Although she recently quit a $50,000-a-year job and took an $8,000 pay cut to work as a paralegal, Bogar has increased the value of her 401(k) contributions, from $2,000 to nearly $9,000. "I've seen what can happen when you put money away," Says Bogar, who plans to rollover her 401(k) to her new employer's plan. She also intends to continue saving for Aaron's college education, investing $50 a month into a 529 college savings plan. Bogar says she always wanted to pursue a career in law but had put her dreams on hold to raise her son.

She decided to test the waters as a paralegal before jumping into law school. She took out a $10,000 personal loan to finance a one-year paralegal program and is planning to take the LSAT. She wants to attend law school at night in the fall of 2007 and is confident she will command a salary of at least $70,000 as a corporate lawyer.

Bogar is considering selling real estate as part of her plan to reduce her debt. She has a real estate license but has only sold property sporadically. Her mother, a real estate agent, has been encouraging her to get back into it and possibly form a partnership.

As she attempts to reconstruct her financial life, Bogar has learned some valuable lessons. "Credit cards are not the answer for me," she concedes. "They can only be for emergencies. What I'm paying for credit cards could be going into an interest-hearing account." Fortunately, she has been vigilant about paying her bills on time and, as a result, has maintained a good credit rating. Bogar is now ready to take charge of her finances: "I know what I need to do.... I see the error of my ways."

The Advice

BLACK ENTERPRISE asked Gwendolyn Kirkland, a certified financial planner with Kirkland, Turnbo & Associates in Matteson, Illinois, to review Bogar's financial situation. Kirkland commends Bogar for being a property owner and having the courage to change careers. But she is concerned that Bogar's "spending habits are working against her. If she doesn't change, even after earning a lawyer's salary, she'll still be struggling."

Kirkland offers these recommendations for Bogar to get back on track:

Put on spending handcuffs. "If Jennifer chooses to purchase anything over $50, she should wait 24 hours before doing so. She needs time to weigh what the item means to her and distinguish between wants and needs," says Kirkland. "She must forget short-term gratification and think long term." Recreational spending will continue to be disastrous to her financial position. "You can't fill an [emotional] void with 'stuff' and spa vacations," says Kirkland, who suggests the paralegal explore free or low-cost activities she can enjoy with family and friends.

Fill the cash reserve gap. Bogar is currently short about $300 each month. She spends roughly $400 a month to lease a BMW 325i. Kirkland advises Bogar to cut her expenses, which include about $160 a month for gas, $150 for clothing, and $80 she puts aside for vacations.

Get real about debt. Bogar refinanced her mortgage in July and wiped out the onerous $11,000 in credit card debt. That's good news, says Kirkland, but only if she doesn't run up the debt again. "She should consider getting rid of two of her three credit cards, especially now that she is making $8,000 less," advises Kirkland. She also recommends that Bogar adopt a new policy: pay off her credit card balance every month, or at least commit to paying off the balance within three months.

Build an emergency fund, "Jennifer doesn't realize that with no cash reserves, she could be in serious trouble if she were to lose her job," says Kirkland. She's a long way from the six months of living expenses Kirkland says she should have set aside. In fact, the $2,000 in contest winnings should be put in a money-market account like the one offered by Emigrant Bank (www.emigrantdirect.com), which is currently paying 5% interest.

Increase income, Kirkland recommends that Bogar join her mother's real estate business. She could go in one night a week and on weekends, suggests Kirkland, and gather listings. She could then partner with her mother to show and sell properties. The earnings from real estate would vastly improve her cash flow.

Prepare for the future. Bogar is off to a positive start in saving for retirement, but Kirkland would like to see her max out on her contributions to her 401(k). Estate planning is also critical since she's a single parent, "She needs to prepare a will, a revocable living trust, a power of attorney, and guardianship documents for her son," says Kirkland. As a divorcee, she should make sure that her ex-husband is no longer the beneficiary related to her retirement account, life insurance, or any other assets.

It would be advantageous to avoid more college loan debt, so Bogar should check with her employer about tuition reimbursement. She has hit some road bumps. But if she learns from her lessons, she can ensure a bright financial future.

Financial Snapshot:

Jennifer Bogar

Gross Income                $47,760
                 ASSET

Townhouse (market value)   $215,000
Checking                        500
Savings                       1,000
401(k)                        8,700
Total                      $225,200

               LIABILITIES

Mortgage                   $152,000
Student loans                21,000
Personal loan                10,000
Total                      $183,000

NET WORTH                   $42,200